Your Business
We have had a lot experience with a wide range of business profiles and can help you decide the best way to structure your company to take advantage of your opportunities. Some of these structures are listed here but which one is best for you is dependent on a number of factors, some of which we have outlined below:
- Your Fiscal Priorities
- Tax Minimization
- Tax Deferral
- Privacy Protection
- Global Investment
- Intellectual Property Exploitation
- Tax Status in your country of residence
- Tax Treaty Status Between Anguilla and Your Country of Residence
- Type of Revenue Stream
- Size of Potential Revenue Streams
- Probable Costs and Expenses
- How To Deal With Accumulated Offshore Funds
- Invest in Portfolios
- Invest in Real Estate
- Dividend (Corporate or Personal) Back To Country of Residence
- Loan Back To Country of Residence
- Transfer Back to Country of Residence
- Others
We can help you address these factors and answer any other questions you may have . The offshore world has many benefits and we are happy to show you the best way to make use of them.
Professional / Consultant
Many individuals offering their services internationally can benefit significantly from using an Offshore Company.
The Offshore Company employs the individual and contracts with the buyer of the services. The fees earned can accumulate offshore tax free. Payment to the individual may then be structured in such a way as to minimize personal income tax in the country of residency.
Typical clients include Consultants, IT professionals, engineers, designers, authors, entertainers and so on.
Examples of some Maritime clients are:
- engineers servicing oil rigs worldwide
- IT professionals designing software for banks in Mexico
- engineers working in Japan, etc.
Trading Companies
Import/Export and general trading activities are one of the most popular uses of Offshore Companies.
The Offshore Company would take orders from the supplier and have the goods delivered directly to the customer. The Offshore Company invoices the customer directly. The profits arising from the difference in the selling/purchase prices is accumulated in the tax free Offshore Company.
Counsel has clients trading in such areas as: products from Germany for sale in The Caribbean; health supplements purchased globally and sold online; buying and selling IT technology, medical equipment and supplies, handicrafts; and so on.
Investment Companies
Offshore Companies are popular vehicles for corporations and individuals to hold investment funds, including bonds, equities, cash, precious metals and so on.
Individuals may also set up offshore investment companies for 3rd party stock trading or personal stock trading via the internet and/or to invest in managed funds.
High net worth individuals also often use offshore investment companies to hold portfolios in different markets, and currencies.
Aside from tax minimization, the use of such offshore investment structures provides for privacy and asset protection as well as diversifying a portfolio and minimizing risk by using and investing in multiple jurisdictions and currencies.
Examples of current clients' interests include trading equities on North American Stock Exchanges, managed investment accounts in Europe and Canada; global investment funds for 3rd party investments; and more.
Holding Companies
Clients often use offshore Holding Companies to own and fund subsidiaries in various countries, implement joint venture projects, hold publically quoted companies, and so on.
It is possible, in certain circumstances, for capital gains arising from the disposal of investments, to be made free of tax. Subsidiaries may also benefit from tax deductions and interest paid on the funding provided by the Holding Company.
Clients could hold interests in Hong Kong, Singapore and Latin America, as well as in North America and Europe. It could be advantageous to combine the offshore Holding Company with a Trust owning the Holding Company, for asset protection reasons.
Intellectual Property
Intellectual Property can easily be owned by an Offshore Company.
Examples include IT software, technology rights, music, literature, patents, trademarks and copyrights.
An offshore company can purchase or be assigned the right to use a copyright, patent, trademark or know-how by its original holders with a power to sublicence. Upon acquisition of the intellectual property right the offshore company can then enter into agreement with licensees around the world who would be able to exploit the intellectual property right in various countries. The resulting profits can accumulate tax free in the Offshore Company. Often, the rights are held by a Trust for asset protection purposes, with the Trust licencing the Offshore Company to exploit the rights.
It is thought preferable to acquire, for example, a patent at the patent pending stage before it becomes very valuable so that the capital payment for the acquisition of the patent can be set at a lower amount. Often royalties paid out of a high tax area attract withholding taxes at source. In many cases an interposing holding company may allow a reduction in the rate of tax withheld at source.
It is also very easy to sell the assets if this becomes economically feasible.
Anguilla's copyright and patent legislation is some of the most modern in the world. In 2002 new Intellectual Property legislation was enacted which updates the laws relating to Trademarks, Patents, Industrial Designs and Copyright, and introduces registration systems for Layout Designs (Topographies) of Integrated Circuits and Geographical Indications and legislation for the protection of Trade Secrets. This legislation is part of the Government's commitment to the development of the e-commerce sector, and forms part of a comprehensive package of new commercial laws. The legislation was drafted to be more closely harmonised with TRIPS.
Counsel's clients include IT software, technology rights, authors, artists and more.
Asset Protection
In the United States, statistics show that a law suit is filed every thirty seconds. About 94% of the world's law suits are filed in the United States. With the changes in UK law, bringing it more in line with US litigation legislation, it is expected that the UK will substantially increase the number of suits that are filed.
On average, most professionals in the United States, be they a lawyer, owner, entrepreneur, doctor, company director, dentist or accountant, can expect to be sued every three years. Internet related law suits are also rising.
Any individual with liquid assets of over US $100,000 should have an Offshore Company and offshore bank account for asset protection purposes. It is much more difficult and costly for lawyers and their clients to launch frivolous and/or dubious law suits in an offshore jurisdiction. One reason is that a local attorney must be retained and paid "up front", not on contingency. Often a substantial bank bond has to be placed with the government to even implement a lawsuit.
Property Holding Company
There can be significant tax advantages to owning real property and land by an offshore company, including the legal avoidance of capital gains, inheritance tax, and property transfer taxes.
It can also facilitate sales, in that the property can be transferred simply by transferring ownership of the existing company to the new owner, thereby reducing legal and other administrative costs.
Many companies and individuals have purchased property in the UK, South Africa, Europe the Caribbean and elsewhere, through the use of Offshore Companies.
Yacht Ownership / Shipping Company
The use of Offshore Companies to own or charter merchant ships and pleasure craft is very common worldwide. Shipping companies may accumulate profits in tax free offshore jurisdictions and, if each ship is placed in a separate Offshore Company, it can obtain significant asset protection by isolating liabilities to each individual ship.
Sale of the vessel can be easily facilitated by the transfer of shares with a ready made offshore structure.
Counsel Ltd has clients in the US, Canada and Europe, operating ships on the high seas, owned by our offshore company structures.
Insurance
Anguilla has enacted some of the best insurance legislation in the industry.
The Insurance Act makes provision for the licensing and regulation of both insurers doing domestic insurance business in Anguilla and insurers from Anguilla engaged in "foreign insurance business", defined as risks and premiums originating outside Anguilla.
The Act also provides for specific kinds of captive insurance companies with a view to promoting captive insurance business in Anguilla. Apart from all of the other advantages of forming a captive insurance company, such as minimising insurance costs; reducing the risks to companies (their insureds would be previously known to them); and access to the reinsurance market, Anguilla has the added advantage of being a zero-tax jurisdiction.
Clearly, the Act is designed to attract a broad range of captive insurance business.
Also, pursuant to the Insurance Regulations, Anguillian companies that issue no more than two private annuities are expressly exempted from the licensing provisions of the Act.
With the approval of the Commission, an insurer licensed under the Act may be owned, or later change its ownership to be owned, by a trust, which can be either a purpose trust or a trust with beneficiaries.
The Act provides comprehensive protection for the insured by allowing premiums to be placed in protected premium accounts. There are also additional provisions protecting the proceeds of an insurance policy from the creditors of the policy holder or the insured.
The procedures for securing a licence for an insurance company are quite straightforward. The application procedure is essentially a check on background and qualifications. Approval is obtainable within a short period of time.
Mutual Funds
The Anguilla Mutual Fund Act
The Anguilla Mutual Fund Act was enacted in August, 2004. The purpose of the legislation is to regulate mutual funds and the managers and administrators who provide administrative support services to mutual funds. The objective is to attract mutual funds business to Anguilla by providing a reasonable, regulated environment.
The Act can be described as a much improved version of the British Virgin Islands Act. Public funds, private funds and professional funds are regulated and encouraged.
A public fund is defined as one making an invitation to the public, or any section thereof, to purchase shares and which is not a private or a professional fund.
A private fund is defined as one with a limited number of investors and whose constituent documents specify that the invitation to purchase shares is to be made on a private basis.
A professional fund is one whose shares are available for purchase only to professional investors; defined by the Act as persons whose ordinary business involves dealing in investments.
For public funds, the Act provides detailed provisions on the requirements for publishing a prospectus, as well as specifying requirements for an annual audit and other annual filings with the Registrar of Mutual Funds.
The procedures for securing fund approval under the Act are quite streamlined. Assuming no complications, approval is obtainable within a short period of time.
The application procedures for private and professional funds are straightforward and considerably less onerous than for public funds. It should be possible to obtain approval for a private or professional fund within two weeks of application.
Administrators and Managers of funds also require licenses. This is essentially a background check that verifies experience and qualifications.
Employment Company
Many companies use Offshore Companies to employ expat staff working on assignments throughout the world.
This generally simplifies the administration of payroll and travel expenses, reduces the exchange problems which may exist in certain countries; and reduces the employee's tax liabilities which are usually related to remittances into the country.
With its high level of accounting expertise Counsel is ideally placed to assist in the set up and administration of these types of structures.